Huasengheng Raises Gold Price Target to $6,000 Amid US Government Shutdown Concerns

Huasengheng has raised its gold price target to $6,000 per ounce, or equivalent to 88,000 baht per baht of gold. The company is worried about the potential recurrence of a US government shutdown. On January 30, 2024, the US government faces a high risk of another government shutdown, which could potentially disrupt the global economic and financial system. The "Sell America" trend has led to heavy selling of the US dollar, pushing its value to a nearly 4-year low. The potential government shutdown might repeat the pattern seen in the Trump 2.0 era. The previous shutdown, which lasted 43 days (October 1 - November 12, 2023), was the longest in US political history. The Congressional Budget Office (CBO) estimated that the previous shutdown caused damages of $11 billion and created delays in government spending worth over $54 billion. While the direct GDP impact might be limited and partially recoverable, the clear damage is to business and financial market confidence. The potential halt of government operations, delayed economic data announcements, and policy uncertainties are pushing investors to seek safer assets, with gold being a direct beneficiary. The shutdown this year could happen sooner than expected if the government budget bill fails to pass the Senate before the deadline on the night of January 30. The primary cause is political conflict, especially regarding budget allocation for the Department of Homeland Security (DHS), which Democratic senators strongly oppose due to immigration law enforcement issues. Analysts predict that the economic impact might be more limited this time, as 6 out of 12 budget bills have already been approved. This would likely result in only a partial government shutdown and may not significantly reduce US GDP. The dollar's weakness is also a concern, having dropped nearly 10% after the previous shutdown. The dollar has reached its lowest level in almost 4 years, reflecting market uncertainties about government policies and potential geopolitical risks.